Although Parliament will be in recess throughout August 2024, the Institute of Chartered Accountants in England and Wales (ICAEW) remains active in preparations for crucial legislative developments, including new audit reform, upcoming budget announcements, and the forthcoming party conference season.
The ICAEW’s outreach to the new government is gaining momentum, with Chief Executive Alan Vallance sending introductory letters to ministers that highlight synergies between the government’s agenda and ICAEW’s manifesto. Following this correspondence, a series of initial meetings are being scheduled with key ministers and senior officials. Notably, ICAEW’s Director of Public Sector and Taxation, Alison Ring, had a productive discussion with the Chancellor’s Senior Special Advisor for Tax, Spencer Thompson, addressing challenges ICAEW members encounter when dealing with HMRC and navigating the complexities of the current tax system. They also explored ICAEW’s stance on the regulation of tax advisors and the enforcement of risk-based Research and Development (R&D) regimes.
Advancing the Audit Reform Workplan
The Draft Audit Reform and Corporate Governance Bill, which was introduced in the King’s Speech, is slated for introduction in Parliament next year. However, ICAEW is deeply involved in the pre-legislative scrutiny phase. Meetings with officials from the Department for Business and Trade have confirmed that the groundwork will build upon the previous government’s response to the consultation aimed at enhancing the UK’s audit frameworks and corporate governance practices, released in May 2022. Additionally, the government is expected to consider emerging issues, such as sustainability reporting and assurance, in conjunction with the audit reform. ICAEW has proactively engaged with members of its Audit and Assurance and Corporate Reporting faculties to assess previous policy positions while developing recommendations for the government regarding key issues that should take precedence in the new legislation.
Preparing for the Upcoming Budget
In a recent parliamentary address, the Chancellor outlined intentions to address a £22 billion gap in public finances with a budget presentation scheduled for 30 October. In light of this situation, ICAEW has expressed support for the formation of a new Office for Value for Money to enhance the efficiency of financial management in central government. ICAEW urges the Chancellor to adopt fiscal guidelines that would enable a focus on economic growth.
Chris Lane, ICAEW’s Senior Policy Manager, affirmed the organisation’s endorsement of the government’s goal to bolster the resilience and dynamism of the UK’s business environment as a pathway to economic stability.
“We believe this approach can drive economic growth and spur investment,”
Murphy stated,
adding that well-considered regulation and strong foundational institutions can not only harness existing achievements but also create an attractive climate for the next wave of business innovation, environmental sustainability, and improved living standards. To ensure the voices of its members are heard, ICAEW submits recommendations to the Treasury regarding budget priorities, with this submission due by 10 September, focusing on the necessity of cohesive long-term strategies in industrial policy, trade, taxation, investment, and the green transition.
Local Audit Concerns
Following the general election, ICAEW promptly reached out to the government about the ongoing local audit backlog, stressing that delays in public financial statement publication have resulted in dangerously low levels of accountability among several local authorities. The government has responded with a written statement from Minister for Local Government, Jim McMahon MP, which proposed additional backstop dates for five audit cycles extending to the financial year 2027-2028. The intent behind this proposal is to progressively restore confidence in the audit process over multiple cycles. In a joint declaration, ICAEW and the Chartered Institute of Public Finance and Accountancy (CIPFA) remarked,
“By implementing backstop dates, we reset the audits of financial statements, which is an essential step toward restoring integrity and mitigating future backlogs.”
Furthermore, Iain Wright, Managing Director of Reputation and Influence at ICAEW, leads expert discussions on the podcast “Accountancy Insights,” where they analyse why approximately three-quarters of councils in England are at least a year behind in publishing their audited accounts. The podcast also covers ICAEW’s insights on the new government’s business tax roadmap and offers updates on the probate service.
Participation in party conferences
With the conclusion of the general election in July, the party conference season emerges as a pivotal opportunity for the ICAEW to influence policy dialogue. Key figures such as Chief Executive Alan Vallance, Iain Wright, and ICAEW President Malcolm Bacchus will be attending the Labour Conference. Their agenda includes active participation in Labour’s highly anticipated Business Day featuring keynote addresses from Chancellor Rachel Reeves and Prime Minister Sir Keir Starmer. Additionally, ICAEW will host an event for its members at KPMG in Liverpool, alongside co-sponsoring an essential discussion on Labour and business with the Fabian Society. At the Conservative Party Conference, ICAEW has partnered with the Enterprise Forum for an event that will feature the Shadow Chancellor, Jeremy Hunt. With the Liberal Democrats now holding 72 seats in the House of Commons, their growing influence places considerable importance on ICAEW’s engagement at their conference.
Vallance noted,
“The party conferences present invaluable opportunities for meaningful discussions on policy. One can easily find themselves in a dialogue with various ministers or shadow ministers while navigating the venues. We remain committed to supporting both the government and opposition in developing effective policies aimed at fostering growth that serves the public interest.”
